How Northern Laos Is Being Swallowed By China

Thousands of Chinese are moving to Laos to benefit from an expatriation bonus. But their mass use of pesticides on banana plantations has created a serious health issue, and displacement of locals has fomented anti-Chinese sentiment.

BOKEO — With its casino surrounded by pseudo-Greek statues, its early century Shanghai-like neighborhood and its Beijing pagodas, the "Golden Triangle Special Economic Zone" is the most extravagant example of Chinese economic presence in northern Laos. This zone, which the Laotian government has allocated to a Chinese company for 99 years, is a Chinese enclave where people live a Beijing lifestyle and speak only Chinese.

It's a sign of the economic changes that have transformed northern Laos, on the border with China. There is a massive penetration of Chinese entrepreneurs in this country, which is one of Asia's poorest in terms of per capita income.

Chinese leaseholders

Around the cities of Luang Prabang, Oudomxay and Luang Namtha, large numbers of Laotian farmers lease their land to Chinese, who plant rubber trees, banana trees or vegetables, in most cases to export them home.

"Laotians often rent out their land to Chinese people because they think they can earn money without working," says Kalia Sompavong, a Laotian guide. But the trend is affecting many sectors.

In Luang Prabang, Laotians who ran a hotel they built with little success eventually rented it out to Chinese entrepreneurs. "I'm fully satisfied," says a Laotian woman who leased her hotel for 10 years to a Chinese man from Yunnan. "I earn more by renting it out to him, and he has contacts to bring in Chinese customers."

These aren't isolated cases. The Chinese nationals who leave to try their luck in Laos receive an expatriation bonus from the Chinese government. "If the husband leaves for Laos, he receives $100,000," says an agricultural development expert in Laos, who wishes to remain anonymous because of the sensitivity of the subject. "If his wife leaves with him, they get an extra $100,000. If a child goes with them, it's another $100,000. But they are forbidden from returning to China before a certain number of years. Their mission is to become successful entrepreneurs."

In certain districts of the Bokeo province, for instance, Chinese nationals are developing banana plantations spreading across thousands of acres on land leased from Laotians.

A serious public health issue

But the massive use of pesticides on these banana plantations has led to a serious public health issue. In the Ton Pheung district, a Laotian family sits in the bamboo hut that they use as a shelter on the banana plantation where they work. "They lost a son, aged 1 1/2, two weeks ago," says a shop owner who resupplies the camp with food every day. "The child suddenly became completely yellow. He was spitting blood and his lips were charred. The doctor said it was a liver problem."

In a hospital nearby, a doctor confirms that the employees of Chinese banana plantations, and especially their very young children, have been coming in sick in large numbers because of the toxic effects of the pesticides.

The problem has become sufficiently serious for the Laotian government itself to react. In late September, the Ministry of Agriculture and Forestry warned four Chinese companies to stop their "excessive use of pesticides" and ordered inspections at banana plantations in several provinces. It also banned the development of any new such plantations.

But out in the fields, things aren't so unequivocal. Chinese entrepreneurs are masters in the art of persuasion. Thanks to "little gifts," local officials often turn a blind eye. "The Chinese come to Laos partly because they no longer have enough land at home," the Laotian guide says. "Also because they've been destroying their land by flooding it with pesticides for the past 30 years. Now, they want to do the same here."

Displaced families

It's not individual Laotians who are affected by all the Chinese nationals in northern Laos. Entire communities — tens of thousands of families — have been displaced to make way for "casino zones" managed by Chinese people or dams built by Chinese companies. Though demonstrations are rare among Laotians, villagers organized a march in the Golden Triangle Special Economic Zone in July to protest their displacement.

The accumulation of tension, displacement and illness is starting to create anti-Chinese resentment in the country. Most recently, there has been major pushback over a government project to turn over one of the country's most beloved natural areas —the Kuang Si Falls near Luang Prabang — to a Chinese company. After an official document about the project was posted on Facebook, tens of thousands of Laotians protested online.

"Soon, the word 'Laotian' will disappear from northern Laos, and everything will be controlled by the Chinese, because the Laotian government has sold this part of the country to China," one Laotian commentater wrote.

In the face of an avalanche of such protests, the Laotian government realized it had gone too far and decided to suspend the project. Still, so much of what has wound up in Chinese hands may never return.